Canadian Lawyer InHouse

31 CANADIANLAWYERMAG.COM/INHOUSE JANUARY/FEBRUARY 2018 I n d u s t r y S p o t l i g h t W hen it comes to people described as "social media influencers," the first names that likely come to mind are the many mem- bers of the Kardashian/Jenner families — most notably Kim Kardashian. They have capitalized on reality tele- vision notoriety and turned it into a significant income stream by being paid to recommend products on their various social media platforms. While they may be the best known in this industry, they are far from alone. As the millennial generation increasingly consumes its entertainment and media through online platforms, so, too, has brand market - ing ramped up its focus on the world of social media. Along with traditional celebrities urging their follow- ers to prefer a certain product, a rapidly growing num- ber of "regular people" are now effectively online stars of their own and can have a significant impact on sales of products that are mentioned on their Twitter feeds, Instagram stories or other platforms. This year, Forbes magazine has even started to compile its list of "top influencers" in the same way the U.S.-based business magazine tracks the world's highest-paid athletes and richest individuals. One of the marketing benefits of social media influ - encers is that it may seem more genuine than a com- mercial on a traditional medium featuring an actor posing as a befuddled father or an athlete pitching the latest energy drink. Nearly 90 per cent of companies surveyed this year by the San Francisco-based influenc- er marketing company Linqia replied that the primary benefit of these platforms is that they are a way to create "authentic content" about a brand. Social media influencers are now a "huge industry," says Catherine Bate, a partner and head of the market - ing, advertising and product compliance group at Miller Thomson LLP in Toronto. "It is only going to grow," she adds. For teenagers and younger people in general, an online recommendation that appears unsolicited can be more effective than traditional advertising, notes Bate. However, there is the potential for legal problems if there is a failure to disclose any paid or sponsored com - ponent to the online content — in other words, if it is not as authentic or unsolicited as it is intended to ap- pear. Ensuring compliance with the guidelines set out by the advertising industry's self-regulatory body in Canada and the Competition Act requires marketers to put themselves in the position of the potential customer, explains Bate. "What is the takeaway for the consumer? What is the general impression analysis?" she says. The regulations related to testimonials, endorse - ments or reviews may not initially have been closely followed in the social media world, observes Bill Hearn, a partner at Fogler Rubinoff LLP in Toronto, who spe- cializes in regulatory compliance in the advertising and marketing field. "For a number of years, it was the Wild West," he says. However, that is no longer the case. "The rules are in place. There is no excuse not to disclose," says Hearn. Regulators are also paying more attention to the use of social media influencers in online advertising and marketing. Ad Standards (formerly Advertising Standards Canada) updated its guidelines in the fall of 2016 for testimonials, endorsements and any representations. It requires disclosure of any "material connection" between the influencer or person endorsing and the UP WITH THE eeping influencers

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